April 30, 2025
Data-driven, skills-based workforce planning is the ticket to a talent-rich and agile workforce
In an era defined by rapid innovation, shifting workforce expectations, and mounting pressure to stay competitive, organisations can no longer afford to treat workforce planning as a reactive function.
Business leaders are therefore increasingly acknowledging the need for proactive, data-driven, and skills-based workforce planning. A strategic workforce planning model powered by skills intelligence and insights can guide organisations through the ups and downs of business, helping them predict and respond to challenges and opportunities with precision and alacrity.
In our previous article, ‘How tech is transforming strategic workforce planning’, we dealt with the transformative powers of technological tools in talent and skills management. In this article, we take a deeper dive into strategic workforce planning, including the role data plays in it and how it can be optimised for the best results.
Strategic workforce planning aims to place the right people with the right skills in the right roles at the right time. It is a continuous process of identifying skills gaps and creating a coherent and structured plan to ensure that the organisation has the right mix of talent, competencies, and technologies to meet current and future business needs while maintaining optimal operations.
Skills-based workforce planning aims to:
A modern strategic workforce planning model actively utilises skills intelligence (data, analytics, performance metrics, etc) and technology (skills management software, etc) to provide evidence-based insights that inform workforce-related decision-making, be it about talent acquisition, employee development, evaluation, or more. Skills-based workforce planning matches people with opportunities based solely on capabilities, ending bias and unfair practices. It reduces the risks associated with skills gaps and improves workforce agility by ensuring that employees have the ability to support the organisation’s long-term business goals. Data-driven workforce planning is essential to creating dynamic and agile skills-based organisations, which see superior outcomes in terms of talent allocation, employee retention, innovation, efficiency, and overall culture.
For a strategic workforce planning model to be successful, it must integrate these three principles:
Most often, businesses respond reactively to change. They wait for change to happen and then come up with a quick fix, which might work initially but affects long-term stability and growth in most cases. Strategic workforce planning makes planning for the future – anticipating a future opportunity or challenge and building a plan to achieve or counter it – a routine exercise. It requires business leaders to get comfortable with launching themselves into unknown, uncomfortable territory at all times.
Predicting the future is impossible and it’s highly likely that the first solution we think up will miss its mark entirely. That’s why strategic workforce learning is a continuous process where leaders learn from mistakes, make course corrections, and update their workforce strategy till they get it right. It requires the ability to see patterns and read the signs correctly, and plenty of patience.
Every organisation is unique, every employee different. And, each industry has its own challenges. To be effective, a strategic workforce planning model must be able to assess current workforce abilities, foresee future requirements, and identify gaps while taking these singularities into account.
Data-driven workforce planning not only has workforce-related benefits but is also advantageous from an operational and strategic viewpoint:
Strategic workforce planning involves several key steps, starting with aligning on strategic goals and assessing current workforce skills before moving on to analysing future demands, identifying skills gaps, and taking action to bridge those gaps. Here are three ways to enhance the process and achieve workforce optimisation:
Strategic workforce planning is built on a foundation of raw data. However, only 33% of HR leaders are confident that their organisations use data effectively for workforce planning, says Gartner. To overcome this hurdle, we recommend that workforce planners use skills intelligence.
Skills intelligence is deep, clear, up-to-date knowledge about the skills people have, need, and are building – across an organisation. It is a systematic, data-driven approach that leverages multiple tools – including skills taxonomy, skills matrix, and skills analytics – to assess, analyse, manage, and develop skills and competencies within an organisation.
With skills intelligence tools, organisations gain a detailed and accurate overview of their current capabilities and potential gaps. These tools also provide real-time skills insights that can be used to create effective talent development programmes built around this assessment. Furthermore, skills intelligence establishes a standard language for skills and unifies data from multiple sources, leading to greater efficiency in identifying the right talent and delivering on learning and development.
Relying solely on external hiring to fill talent deficiencies is not only cost-intensive, it might not be enough in a talent-strapped labour market. Many skills-based organisations have found a better alternative in internal talent development. For instance, managers can use strategic workforce planning to identify people who are in soon-to-be obsolete roles but possess skills and competencies that make them suitable for alternative emerging roles. Furthermore, they can weigh the cost and time implications of upskilling and reskilling these employees to prepare them for future roles versus hiring external candidates and onboarding and training them. Investing in internal talent development and internal mobility brings another benefit that external hiring lacks – it helps improve employee engagement and retention, which remain top HR priorities in 2025. Providing opportunities for career growth and skill development boosts employee engagement and job satisfaction and reduces turnover. To sum up, a workforce strategy must come with built-in internal talent development and talent retention strategies to make the right impact.
People are an organisation’s greatest asset and its largest investment as well. Employers must, therefore, prioritise talent investments as much as they do financial investments. Long-term employee development is essential for overall business health as it creates an available pipeline of skilled, qualified candidates who can be called upon to fill a role or take on a responsibility when the need arises, without having to make costly hires from outside. Driven by the need to build a future-ready and agile workforce, many skills-based organisations are already doubling down on creating learning pathways to help employees pick up in-demand competencies. At the same time, they are carving new avenues for professional growth by helping employees find projects that not only suit their skill sets but also interest and excite them, as well as mentorship opportunities. Employee development is a long-term commitment. Leaders must be prepared to constantly source, engage, and develop talent. The rewards ought to be incentive enough.
Making skills-based workforce planning an integral part of core business operations significantly improves an organisation’s ability to anticipate future workforce needs and respond to change with agility. It also adds weight to talent decisions, ensuring that leaders across the organisation can no longer dismiss workforce-related decisions by claiming they don't concern them directly; they must be involved because the decisions are directly relevant to the organisation’s overall success.
However, for organisations, the greatest motivation for embedding skills management and talent strategies into core business operations is the return on investment, as seen in this McKinsey study. In this report, McKinsey has a term for organisations that “excel at creating opportunities for their employees to build skills… while consistently clearing the highest bar for financial performance”. It calls them “People + Performance Winners”. In comparison to companies that are purely performance-driven or people-focused, People + Performance Winners show higher total shareholder returns, experience half the earnings volatility, and are 1.5 times more likely to maintain their top tier status year after year, says the report. Apart from profitability, the study adds, People + Performance Winners show greater resilience in times of crisis and more consistency during normal business fluctuations.
It is a given that a strong strategic workforce planning model must be capable of using data efficiently. The latest technological tools make the process smarter and smoother, yet many organisations hesitate to leverage them.
Here’s a scenario – Company XYZ’s primary focus is to identify and fill skills gaps. After the workforce planning team gives MuchSkills’ skills management platform a try, here’s how the process will play out:
The workforce planning team begins by inviting employees to join MuchSkills, while simultaneously creating a master list on the platform of all the skills the organisation knows it needs to achieve its business goals. These may include hard and soft skills, technical competencies, or any other capabilities critical to success. As each team member sets up their profile, they can select the skills they bring to the table from this master list and also add skills outside of it. This process captures information such as skills, competencies, proficiency levels, certifications, languages, and more. All this data is then organised into a clear, easy-to-understand visualised skills matrix.
With a clear view of existing employee skills and the skills required to meet strategic objectives, the organisation can now use MuchSkills to conduct a skills gap analysis at the individual, team, or organisational level. This analysis helps them assess the number of employees per skill and their proficiency levels, understand how skills are distributed across departments and locations, track skills gained or lost over time, identify gaps, and uncover hidden capabilities and adjacent skills.
At this stage, the workforce planning team and the organisation’s leaders know exactly what skills require cultivating and how. Using the employee development tool, they have a way to do this in-house – by planning relevant and personalised upskilling and reskilling programmes and mentorships, helping team members set goals, and so on. Based on the data insights they gain, the planning team is now better equipped to improve role fit and provide internal mobility opportunities across the organisation. Because this is a continuous process, leaders also get to track employee growth and development over time.
When done right, strategic workforce planning becomes a transformative force – one that secures an organisation’s future, even amid constant change. But it all begins with leadership recognising that workforce planning is not just an HR function, but a core business activity. By embracing data-driven, technology-enabled planning as an integral part of their overall strategy, organisations take a decisive step toward building an agile workforce, achieving long-term objectives, and driving sustained growth.
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Future-fit companies are using skills intelligence platforms like MuchSkills to drive smarter workforce planning.
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